Virtual Landowners Say Hands Off My Imaginary Real Estate

As the popularity of online game-playing has increased, so have the opportunities to implement value out of the "currency" some of those games use to reward players. In other words, virtual economies are developing a value that some would agree can have as much impact as actual ones. It was therefore only a matter of time before those virtual currencies spilled into the real world.

Look at something as ubiquitous as frequent flyer programs. Countless websites exist where miles, the currency of those programs, can actually be bought and sold with real world dollars and cents. The same goes for World of Warcraft Gold, now bought and sold as readily as the precious metal.

Wherever you have a valued currency, it only takes a bit of gumption to develop a virtual market with real world stakes. One such burgeoning virtual market is the virtual real estate market.From hotels to luxury condos, games like Second Life have created a forum where buying and selling an imaginary Tudor mansion with a kidney shaped pool in back is not only possible but lucrative. And a new CNN report asks what rights, if any, these "landowners" have to virtual property.

"Virtual property in games is nothing new," says Gabe Zichermann, CEO of rmbrME and beamME, and co-writer of "Game-Based Marketing." "I mean, Monopoly was based entirely on the idea."

Second Life has perhaps the best-known virtual real estate market and some might argue, the most developed .But even games as diverse as Farmville and We Rule are based around simple real estate concepts as ownership, renting and subleasing.

But now, according to the CNN report, real world property and consumer protection laws are being mined to protect some of these virtual properties.

A class action suit by player-cum-property owners of the game Second Life argues that they were misled into believing that the real investments they made into virtual land made them virtual landowners. They claim that, by right, the "virtual property they purchased and created" belongs to them.

Sound crazy? Actually, this suit isn't even the first brought against Linden Lab, the makers of the Second Life virtual platform.

"Since 2006, users have been suing Second Life about all kinds of real estate issues," points out Zichermann, "including their perception of unfair changes in the `law' or `the terms of service' that materially change the value of their holdings.

"The critical lesson from this," he continues, "is that once enough people buy into a concept of real estate, it becomes valuable. The trick, as with your principal real estate holdings, is to have a good sense of market trends, understand the legal landscape, and know your goals and objectives -- are you there to have fun or make money? Both are fine, but they carry different risks and rewards."

The fact is, these online worlds are fundamentally, at least in a legal sense, at the mercy of the companies' that create them. For now, a gaming avatar has about as many rights as a Monopoly shoe and the rules of the game remain subject to "house rules."

But maybe the litigants in this new Second Life case will come out victorious and change the rules of the game. Perhaps they will recoup some of their investments and walk away virtual as well as real world winners.

It happens all the time in real estate. One day a Tudor mansion with a pool is hot, and the next day, the bubble bursts -- virtual or not -- leaving property owners (or their avatars) all wet.